Yatsen Holding Ltd (YSG) 2020 Q4 法說會逐字稿

Ladies and gentlemen, good day, and welcome to the Yatsen Fourth Quarter and Full Year 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Irene Lyu, Head of Strategic Investment and Capital Markets. Please go ahead.

女士們，先生們，美好的一天，歡迎來到 Yatsen 第四季度和 2020 年全年收益電話會議。今天的會議正在錄製中。現在，我想把會議轉交給戰略投資和資本市場主管 Irene Lyu。請繼續。

Thank you, operator. Please note the discussion today will contain forward-looking statements relating to the company's future performance and our intent is to qualify for the safe harbor from liability as established by the U.S. Private Securities Litigation Reform Act. Such statements are not guarantees of the future performance and are subject to certain risks and uncertainties, assumptions and other factors. Some of these risks are beyond the company's control and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

謝謝你，運營商。請注意，今天的討論將包含與公司未來業績相關的前瞻性陳述，我們的意圖是符合美國私人證券訴訟改革法案規定的安全港免責條款。此類陳述不是對未來業績的保證，並受某些風險和不確定性、假設和其他因素的影響。其中一些風險超出了公司的控制範圍，可能導致實際結果與今天的新聞稿和本次討論中提到的結果大相徑庭。

A general discussion of the risk factors that could affect Yatsen's business and financial results is included in certain filings of the company with the Securities and Exchange Commission. The company does not undertake any obligation to update this forward-looking information, except as required by law. During today's call, management will also discuss certain non-GAAP financial measures for comparison purposes only. For a definition of non-GAAP financial measures and the reconciliation of GAAP to non-GAAP financial results, please see the earnings release issued earlier today.

對可能影響 Yatsen 的業務和財務業績的風險因素的一般性討論包含在該公司向美國證券交易委員會提交的某些文件中。除法律要求外，公司不承擔任何更新此前瞻性信息的義務。在今天的電話會議上，管理層還將討論某些非 GAAP 財務措施，僅供比較之用。有關非 GAAP 財務指標的定義以及 GAAP 與非 GAAP 財務結果的調節，請參閱今天早些時候發布的收益報告。

Joining us today on the call from Yatsen's senior management are Mr. Jinfeng Huang, our Founder, Chairman and CEO; and Mr. Donghao Yang, our CFO and Director. Management will begin with prepared remarks, and the call will conclude with a Q&A session. As a reminder, this conference is being recorded. In addition, a webcast replay of this conference call will be available on Yatsen's Investor Relations website at ir.yatsenglobal.com.

今天，我們的創始人、董事長兼首席執行官黃金峰先生應中成高級管理層的電話加入了我們的行列；以及我們的首席財務官兼董事楊東浩先生。管理層將從準備好的發言開始，電話會議將以問答環節結束。提醒一下，這次會議正在錄製中。此外，Yatsen 的投資者關係網站 ir.yatsenglobal.com 將提供本次電話會議的網絡直播重播。

I will now turn the call over to Mr. Jinfeng Huang. Please go ahead.

我現在將電話轉給黃金峰先生。請繼續。

Okay. Thank you, Irene. And thank you, everyone, for participating in Yatsen's inaugural earnings conference call today. So 2020 was an exciting year for Yatsen as we made great strides across our business and achieved numerous milestones. So one of the most significant highlights for the year was our successful listing on the New York Stock Exchange on November 19 last year. So marking the start of our new journey as a public company. So on behalf of Yatsen's employees and myself, I would like to extend our sincerest gratitude and appreciation to all of long-time and the new shareholders who continue to support us.

好的。謝謝你，艾琳。感謝大家今天參加 Yatsen 的首次財報電話會議。因此，2020 年對逸仙來說是激動人心的一年，因為我們在業務上取得了長足的進步，並實現了許多里程碑。因此，這一年最重要的亮點之一是我們於去年 11 月 19 日在紐約證券交易所成功上市。因此，標誌著我們作為一家上市公司的新旅程的開始。因此，我謹代表中成員工和我本人，向所有繼續支持我們的長期和新股東表示最誠摯的謝意和感謝。

Today, for the first time as a public company, we are pleased to present you with our solid operating and financial performance for the fourth quarter and the full year of 2020. So throughout the year, we leveraged our past successes to further fortify our leading position in color cosmetics for Gen Z and millennial customers. So Yatsen's firm commitment to product innovation and development, enhancing brand portfolio and product offerings and strengthening ties with customers through both online and offline channels, position us as an unique and competitive player in China's fast-growing beauty industry.

今天，作為一家上市公司，我們很高興首次向您展示我們穩健的運營和財務業績，包括 2020 年第四季度和全年。因此，在這一年中，我們利用過去的成功進一步鞏固了我們的領先地位在面向 Z 世代和千禧一代客戶的彩妝領域佔據一席之地。 So Yatsen 對產品創新和開發的堅定承諾、增強品牌組合和產品供應以及通過線上和線下渠道加強與客戶的聯繫，使我們成為中國快速發展的美容行業中獨特且具有競爭力的參與者。

So as a result, for the full year, we grew our total net revenues by 72.6% year-over-year to RMB 5.2 billion and increased our gross sales by 72.4% from RMB 3.5 billion in 2019 to RMB 6.1 billion in 2020.

因此，全年我們的總淨收入同比增長 72.6% 至 52 億元人民幣，總銷售額從 2019 年的 35 億元人民幣增長 72.4% 至 2020 年的 61 億元人民幣。

In an extension of the robust momentum we saw throughout the year, fourth quarter total net revenue increased 71.7% year-over-year to RMB 2 billion, and gross sales climbed 73.3% year-over-year to RMB 2.3 billion. So our quarter results are a testament to our ability to quickly grow our business as evidenced by the accelerated expansion of our flagship brand for the Diary and the rapid growth witnessed by our other brands, including Little Ondine and Abby's Choice soon after being introduced to our portfolio.

作為全年強勁勢頭的延續，第四季度總淨收入同比增長 71.7% 至人民幣 20 億元，總銷售額同比增長 73.3% 至人民幣 23 億元。因此，我們的季度業績證明了我們快速發展業務的能力，我們旗艦品牌 Diary 的加速擴張以及我們其他品牌（包括 Little Ondine 和 Abby's Choice文件夾。

So the strength across our brand portfolio demonstrated our ability to incubate and scale brands and assures us that we are on the right track as we continue to press forward. These numbers also display the effectiveness of our disruptive B2C model, which enabled us to consistently deliver innovative products and personalized services that deepen customer engagement.

因此，我們品牌組合的實力證明了我們孵化和擴大品牌規模的能力，並向我們保證，我們在繼續前進的過程中走在正確的軌道上。這些數字還顯示了我們顛覆性 B2C 模式的有效性，該模式使我們能夠始終如一地提供創新產品和個性化服務，從而加深客戶參與度。

So the growing popularity of homegrown Chinese beauty brands is creating a great opportunity for us as our brand targets Gen Z and millennials, the golden cohort of China's beauty industry.

因此，中國本土美容品牌的日益普及為我們創造了一個很好的機會，因為我們的品牌目標是 Z 世代和千禧一代，這是中國美容行業的黃金群體。

So our evolving product line is steadily gaining traction among young consumers and seeing substantial growth. So in the fourth quarter, the number of B2C customers reached another record high of 14.4 million, and this number came in at 32.3 million for the full year. So this represents impressive year-over-year gains of 31% and 38%, respectively.

因此，我們不斷發展的產品線正在穩步吸引年輕消費者，並實現大幅增長。因此在第四季度，B2C 客戶數量再創歷史新高，達到 1440 萬，全年達到 3230 萬。因此，這分別代表了令人印象深刻的 31% 和 38% 的同比增長。

So color cosmetics are the foundation of our business and a dominant contributor to revenue. So having said that, we further widened our product variety and offerings during the fourth quarter with more emphasis on quality, innovation and uniqueness. So we deepened our reach in the skincare segment with the acquisition of Galénic, an iconic premium French skincare brand from Pierre Fabre and the masstige Chinese skincare which is a leading medical skincare brand known for its highly effective products, targeting various sensitivities in Asian skin. We also entered a strategic partnership with Sensient Technologies, a partnership that is enhancing our R&D capabilities for innovative colors and the new materials for color cosmetics.

因此，彩妝是我們業務的基礎，也是收入的主要貢獻者。話雖如此，我們在第四季度進一步擴大了產品種類和供應範圍，更加強調質量、創新和獨特性。因此，我們通過收購皮爾法伯 (Pierre Fabre) 旗下標誌性的法國優質護膚品牌 Galénic 和以高效產品而聞名的領先醫學護膚品牌 masstige Chinese skincare 加深了我們在護膚領域的影響力，針對亞洲皮膚的各種敏感性。我們還與 Sensient Technologies 建立了戰略合作夥伴關係，該合作夥伴關係正在增強我們在創新色彩和彩妝新材料方面的研發能力。

So boosting quality control for raw materials and amplifying the use of technology to solve recurring challenges in the color cosmetics industry. So leveraging our disruptive B2C model and core platform capabilities, we are working towards building the multi-brand portfolio that drives a broader product selection and adjusts to the needs of more customers. With this vision in mind, I would like to review some of our recent activities and unpack upcoming initiatives for 2021 and beyond.

因此，加強對原材料的質量控制並擴大技術的使用，以解決彩妝行業反復出現的挑戰。因此，利用我們顛覆性的 B2C 模式和核心平台功能，我們正在努力構建多品牌產品組合，以推動更廣泛的產品選擇並適應更多客戶的需求。考慮到這一願景，我想回顧一下我們最近的一些活動，並闡述 2021 年及以後即將推出的舉措。

So on the back of the success of our existing brands, we plan on introducing some more brands through self-incubation and acquisitions in target market segments, where we see considerable room for growth.

因此，在我們現有品牌成功的背景下，我們計劃在目標細分市場通過自我孵化和收購的方式引入更多品牌，我們認為這些細分市場有很大的增長空間。

Our ideal portfolio will consist of diversified brands with varying marketing -- market positioning from mass market to high-end as we seek to attract a wide presence of consumers. We are also proactively pursuing strategic investments, acquisitions and collaborations, both domestically and overseas. As announced earlier this month, we recently acquired the prestigious skincare brand, Eve Lom from Manzanita Capital. So with the brand's multi award-winning product range, our exceptional e-commerce capabilities and the demonstrated track record of innovation, we are confident that we will further accelerate Eve Lom's growth in the global market.

我們理想的產品組合將包括具有不同營銷方式的多元化品牌——市場定位從大眾市場到高端市場，因為我們力求吸引廣泛的消費者。我們還積極尋求國內外的戰略投資、收購和合作。正如本月早些時候宣布的那樣，我們最近從 Manzanita Capital 手中收購了著名的護膚品牌 Eve Lom。因此，憑藉該品牌屢獲殊榮的產品系列、我們卓越的電子商務能力和卓越的創新記錄，我們有信心進一步加速 Eve Lom 在全球市場的增長。

So to close, before I hand it over to Donghao, China's beauty market has enormous potential waiting to be unleashed. So our customer-centric value proposition, disruptive B2C business model and strong R&D capabilities uniquely position Yatsen to play a leading role in the country evolving beauty industry. So looking ahead, we remain committed to redefining the landscape of Chinese beauty, even as we engage and grow with the next-generation of consumers to provide them with a new journey of beauty discovery. So thank you, everyone.

所以要結束，在我把它交給東浩之前，中國的美容市場還有巨大的潛力等待釋放。因此，我們以客戶為中心的價值主張、顛覆性的 B2C 商業模式和強大的研發能力使 Yatsen 能夠在不斷發展的美容行業中發揮獨特的領導作用。因此，展望未來，我們將繼續致力於重新定義中國美的面貌，同時與下一代消費者互動並與他們一起成長，為他們提供新的美髮現之旅。所以謝謝大家。

With that, I will now turn the call over to our CFO, Donghao Yang, to discuss our financial performance.

有了這個，我現在將把電話轉給我們的首席財務官楊東浩，討論我們的財務業績。

Thank you, David, and hello, everyone. We finished the fourth quarter of 2020 with a set of solid financial results. Our healthy top line growth reflects the strong performance we achieved across our brand portfolio and demonstrates the deep market appeal of our products, success of our growth strategy and our ability to skillfully execute our operational plans.

謝謝你，大衛，大家好。我們以一系列穩健的財務業績結束了 2020 年第四季度。我們健康的收入增長反映了我們在品牌組合中取得的強勁表現，並展示了我們產品的深厚市場吸引力、我們增長戰略的成功以及我們巧妙地執行運營計劃的能力。

In an effort to scale our brand and expand our portfolio, profitability was impacted during the quarter as a result of increased selling and marketing expenses as well as general and administrative expenses. While our gross margin rose to 66.3% in the quarter compared with 62.7% in the same period last year.

為了擴大我們的品牌規模並擴大我們的產品組合，本季度的盈利能力受到銷售和營銷費用以及一般和管理費用增加的影響。而我們本季度的毛利率從去年同期的 62.7% 上升至 66.3%。

2020 was a pivotal year for Yatsen and the beauty industry as a whole, and our efforts in product innovation and development are paying off. As we move deeper into 2021, we remain committed to our strategy of further growing our product offerings, customer base, and revenue, which we firmly believe will lay a solid foundation for profitability in the long run.

2020年對於逸仙乃至整個美容行業來說都是關鍵的一年，我們在產品創新和開發方面的努力正在取得成效。隨著我們進入 2021 年，我們將繼續致力於進一步擴大我們的產品供應、客戶群和收入的戰略，我們堅信這將為長期盈利奠定堅實的基礎。

Now moving on to our quarterly financial highlights. Before I get started, I would like to clarify that all financial numbers presented today are in RMB amounts and all percentage changes refer to year-over-year changes, unless otherwise noted.

現在繼續我們的季度財務亮點。在開始之前，我想澄清一下，除非另有說明，否則今天提供的所有財務數字均以人民幣金額為單位，所有百分比變化均指同比變化。

Total net revenues for the fourth quarter of 2020 increased by 71.7% to RMB 2 billion from RMB 1.1 billion for the fourth quarter of 2019, primarily attributable to the growth in sales volume of our beauty products, driven by increases in the number of customers during the same period.

2020 年第四季度的總淨收入從 2019 年第四季度的人民幣 11 億元增長 71.7% 至人民幣 20 億元，這主要是由於我們的美容產品銷量增長，這是由於期間客戶數量增加所致同一時期。

Gross profit for the fourth quarter of 2020 increased by 81.6% to RMB 1.3 billion from RMB 716.3 million for the fourth quarter of 2019. Total operating expenses for the fourth quarter of 2020 were RMB 2.8 billion compared to RMB 644.8 million for the fourth quarter of 2019. As a percentage of total net revenues, total operating expenses increased to 144.5% from 56.5% in the prior year period.

2020 年第四季度毛利從 2019 年第四季度的人民幣 7.163 億元增長 81.6% 至人民幣 13 億元。2020 年第四季度總運營費用為人民幣 28 億元，而去年第四季度為人民幣 6.448 億元。 2019 年，總營業費用佔總淨收入的百分比從去年同期的 56.5% 增加到 144.5%。

Fulfillment expenses for the fourth quarter of 2020 were RMB 144.7 million compared to RMB 113.2 million for the fourth quarter of 2019. The increase was primarily due to: one, an increase in warehousing, shipping and handling expenses, driven by the growth in sales volumes of our beauty product during the same period. And two, share-based compensation expenses recognized upon occurrence of IPO according to U.S. GAAP. As a percentage of total net revenues, fulfillment expenses decreased to 7.4% from 9.9% in the prior year period.

2020 年第四季度的履行費用為人民幣 1.447 億元，而 2019 年第四季度為人民幣 1.132 億元。增加的主要原因是：一是在銷量增長的推動下，倉儲、運輸和裝卸費用增加我們的美容產品在同一時期。二、按美國公認會計原則在IPO發生時確認的股權激勵費用。作為總淨收入的百分比，履行費用從去年同期的 9.9% 下降到 7.4%。

Selling and marketing expenses for the fourth quarter of 2020 were RMB 1.4 billion compared to RMB 446.3 million for the fourth quarter of 2019. The increase was primarily due to: one, an increase in advertising, marketing and brand promotion costs; two, an increase in expenses incurred during the development of experience stores; and three, share-based compensation expenses recognized upon occurrence of IPO according to U.S. GAAP.

2020 年第四季度營銷費用為人民幣 14 億元，而 2019 年第四季度為人民幣 4.463 億元。增加的主要原因是：一是廣告、營銷和品牌推廣成本增加；二、體驗店開發費用增加；三、按美國公認會計原則在IPO發生時確認的股權激勵費用。

As a percentage of total net revenues, selling and marketing expenses were 70.3% compared to 39.1% in the prior year period.

銷售和營銷費用佔總淨收入的百分比為 70.3%，而去年同期為 39.1%。

General and administrative expenses for the fourth quarter of 2020 were RMB 1.3 billion compared to RMB 71.9 million for the fourth quarter of 2019. The increase was primarily due to: one, an increase in personnel costs; and two, recognized expenses upon the occurrence of IPO according to U.S. GAAP.

2020 年第四季度的一般和管理費用為人民幣 13 億元，而 2019 年第四季度為人民幣 7190 萬元。增加的主要原因是：一是人員成本增加；二、按美國公認會計原則在IPO發生時確認費用。

As a percentage of total net revenues, general and administrative expenses were 65.6% compared to 6.3% in the prior year period. Research and development expenses for the fourth quarter of 2020 were RMB 25.6 million compared to RMB 13.4 million for the fourth quarter of 2019. The increase was primarily due to, one, an increase in personnel costs; and two, recognized share-based compensation expenses upon the occurrence of IPO according to U.S. GAAP.

一般和行政費用占淨收入總額的百分比為 65.6%，而去年同期為 6.3%。 2020 年第四季度研發費用為人民幣 2560 萬元，而 2019 年第四季度為人民幣 1340 萬元。增加的主要原因是：一是人員成本增加；二、按美國公認會計原則在IPO發生時確認股權激勵費用。

As a percentage of total net revenues, research and development expenses were 1.3% compared to 1.2% in the prior year period.

研發費用佔總淨收入的百分比為 1.3%，而去年同期為 1.2%。

Loss from operations for the fourth quarter of 2020 were RMB 1.5 billion compared to income from operations of RMB 71.5 million for the fourth quarter of 2019. Non-GAAP loss from operations for the fourth quarter of 2020 was RMB 290.1 million compared to non-GAAP income from operations of RMB 90 million for the fourth quarter of 2019.

2020 年第四季度的運營虧損為人民幣 15 億元，而 2019 年第四季度的運營收入為人民幣 7,150 萬元。與非美國通用會計準則相比，2020 年第四季度的非美國通用會計準則運營虧損為人民幣 2.901 億元2019年第四季度營業收入為人民幣9000萬元。

Net loss for the fourth quarter 2020 was RMB 1.5 billion compared to net income of RMB 46.2 million for the fourth quarter of 2019. Non-GAAP net loss for the fourth quarter of 2020 was RMB 287.4 million compared to non-GAAP net income of RMB 64.8 million for the fourth quarter of 2019.

2020 年第四季度淨虧損為人民幣 15 億元，而 2019 年第四季度淨利潤為人民幣 4620 萬元。2020 年第四季度非美國通用會計準則淨虧損為人民幣 2.874 億元，而非美國通用會計準則淨利潤為人民幣2019 年第四季度為 6480 萬。

Net loss attributable to Yatsen's ordinary shareholders per diluted ADS for the fourth quarter of 2020 was RMB 4.04 compared to net income attributable to Yatsen's ordinary shareholders per diluted ADS of RMB 0.1 for the fourth quarter of 2019.

2020 年第四季度每股攤薄 ADS 歸屬於中成普通股股東的淨虧損為 4.04 元人民幣，而 2019 年第四季度每股攤薄 ADS 歸屬於中成普通股股東的淨利潤為 0.1 元人民幣。

Non-GAAP net loss attributable to Yatsen's ordinary shareholders per diluted ADS for the fourth quarter of 2020 was RMB 0.73 compared to non-GAAP net income attributable to Yatsen's ordinary shareholders per diluted ADS of RMB 0.16 for the fourth quarter of 2019. As of December 31, 2020, the company had cash and cash equivalents and restricted cash of RMB 5.7 billion compared to RMB 676.6 million as of December 31, 2019.

2020 年第四季度非美國通用會計準則歸屬於中成普通股股東的每股攤薄美國存託股淨虧損為 0.73 元人民幣，而 2019 年第四季度非美國通用會計準則歸屬於每股攤薄美國存託股普通股股東的淨利潤為人民幣 0.16 元。截至 12 月截至 2020 年 12 月 31 日，公司擁有現金和現金等價物以及受限制現金 57 億元人民幣，而截至 2019 年 12 月 31 日為 6.766 億元人民幣。

For the quarter ended December 31, 2020, net cash used in operating activities was RMB 362.1 million. Looking at our business outlook for the first quarter of 2021, we expect our total net revenues to be between RMB 1.37 billion and RMB 1.42 billion, representing a year-over-year growth rate of approximately 35% to 40%. This forecast reflects our current and preliminary view on the market and operational conditions, which is subject to change. With that, I would now like to turn the call to Q&A.

截至 2020 年 12 月 31 日止季度，經營活動使用的現金淨額為人民幣 3.621 億元。展望我們對 2021 年第一季度的業務展望，我們預計我們的總淨收入將在人民幣 13.7 億元至人民幣 14.2 億元之間，同比增長率約為 35% 至 40%。該預測反映了我們對市場和運營狀況的當前和初步看法，可能會發生變化。有了這個，我現在想把電話轉到問答環節。

(Operator Instructions) And the first question comes from Christine Cho with Goldman Sachs.

（操作員說明）第一個問題來自高盛的 Christine Cho。

David and Donghao, congratulations on your first earnings call. I have 2 quick questions. One, could you give kind of your key assumptions behind your guidance for the next quarter? And secondly, I would love to get an update on the Perfect Diary skincare extension plans. And also with all the acquisitions, Galénic, Eve Lom and some of the skincare brands, how do you see the skincare mix evolving in the long run?

David 和 Donghao，祝賀你們的第一次財報電話會議。我有 2 個快速問題。第一，你能否給出下一季度指導背後的關鍵假設？其次，我很想了解有關完美日記護膚擴展計劃的最新信息。此外，通過收購 Galénic、Eve Lom 和一些護膚品牌，您如何看待護膚組合的長期發展？

Christine, sorry, I didn't quite get your first question. So you want us to provide some color behind the Q1 guidance or what?

克里斯汀，抱歉，我不太明白你的第一個問題。所以你想讓我們在 Q1 指導背後提供一些色彩還是什麼？

Yes. Yes.

是的。是的。

I'm sorry, what do you mean by color? I mean, the guidance is a guidance, is 35% to 40%. I'm sorry, I didn't....

對不起，你說的顏色是什麼意思？我的意思是，指導就是指導，是 35% 到 40%。對不起，我沒有……

Yes. So some market conditions that you're looking at, what kind of growth you're looking at for the category as a whole. The FX rates, you mentioned, is 6.52. But what are some of the things -- let me phrase it this way, what are some of the key factors that could be very important to looking into first quarter.

是的。所以你正在關注的一些市場條件，你正在尋找整個類別的什麼樣的增長。您提到的匯率是 6.52。但是，有些事情是什麼——讓我這樣說，對於研究第一季度可能非常重要的一些關鍵因素是什麼。

Well, again, I think we still continue to execute our strategies in terms of one, our existing brands, Perfect Diary, Little Ondine, and Abby's Choice, we continue to grow those brands. And two, we have acquired a number of new brands. And we're currently focusing on the integration of those new brands into our existing business and operations. And -- but in Q1, the contribution in terms of revenue from those newly acquired brands is still very limited. But going into in Q2 and Q3, Q4, the later part of this year, we do expect increasing contributions from those new brands. We still have the second question to answer, Jinfeng, go ahead.

好吧，我認為我們仍然會繼續執行我們的戰略，我們現有的品牌，Perfect Diary、Little Ondine 和 Abby's Choice，我們會繼續發展這些品牌。第二，我們收購了一些新品牌。我們目前正專注於將這些新品牌整合到我們現有的業務和運營中。而且 - 但在第一季度，這些新收購品牌的收入貢獻仍然非常有限。但進入今年下半年的第二季度和第三季度、第四季度，我們確實預計這些新品牌的貢獻會增加。我們還有第二個問題要回答，金峰，你說吧。

So for the perfect skincare expansion, I think -- because right now, we are rolling out the skincare products in our offline stores. And also, we have the main product line coming in the middle of this year. So I believe -- so we'll see our consistent commitment in expanding the skincare, especially we leverage the brand equity. So we believe long-term wise, the skincare will contribute a portion of the Perfect Diary's growth. And just to build on the -- for the Q1, like the guidance expectation. And also, if you look at for our existing brands and most of the new product launches usually now in Q1. And so there will be more new products and even new brands coming out to launch after the Q1.

因此，為了完美的護膚擴展，我認為——因為現在，我們正在線下商店推出護膚產品。而且，我們的主要產品線將在今年年中推出。所以我相信——所以我們會看到我們在擴大護膚品方面的一貫承諾，尤其是我們利用品牌資產。所以我們相信，從長遠來看，護膚品將為完美日記的增長貢獻一部分。並且只是建立在 - 對於第一季度，就像指導預期一樣。而且，如果你看看我們現有的品牌和大多數新產品通常在第一季度推出。所以Q1之後會有更多的新品甚至新品牌出來推出。

And the next question comes from Dustin Wei with Morgan Stanley.

下一個問題來自摩根士丹利的 Dustin Wei。

So I think the first question is still related to the guidance of the 35% to 40% year-on-year. I kind of think of that first quarter '20, even for the online business was slightly or meaningfully impacted by COVID. So there's sort of a little low base effect there, and yet we have this guidance. So not sure if we can talk about the breakdown by brand or some of dynamics for online, offline, like, for example, we think like 35% to 40% sales growth for the whole company, then what's the growth that we should look for the Perfect Diary, for example, or what's the growth for online? Just try to get a sense about that. Management is a little bit too conservative or if this is a reasonable guidance.

所以我認為第一個問題仍然與 35% 到 40% 的同比指導有關。我有點想到 20 年第一季度，即使是在線業務也受到 COVID 的輕微或重大影響。所以那裡的基礎效應有點低，但我們有這個指導。所以不確定我們是否可以討論按品牌細分或線上、線下的一些動態，例如，我們認為整個公司的銷售額增長 35% 到 40%，那麼我們應該尋求什麼樣的增長例如完美日記，或者在線的增長是什麼？試著去了解一下。管理層有點過於保守，或者這是一個合理的指導。

And then if we are kind of looking for slightly slower growth, is that some of the strategic change here that management thinks for the existing brands, company will need to focus more on the profitability or sort of lower loss ratio and then focus more on the newer brands.

然後，如果我們正在尋找略微放緩的增長，是管理層認為現有品牌的一些戰略變化，公司將需要更多地關注盈利能力或更低的虧損率，然後更多地關注較新的品牌。

So that's sort of related to, I guess, the first quarter guidance and some of the potential strategy change.

所以我想這與第一季度的指導和一些潛在的戰略變化有關。

I guess the second question is that when we think about the more premium brand like Galénic or Eve Lom, are they the brands that are going to be generating the profitable growth? Or the company will use the similar sort of methodology to really drive the very strong sales growth and then -- but this brand yet in the short-term will be loss making.

我想第二個問題是，當我們考慮像 Galénic 或 Eve Lom 這樣的高端品牌時，它們是否會產生盈利增長？或者該公司將使用類似的方法來真正推動非常強勁的銷售增長，然後 - 但這個品牌在短期內將會虧損。

Third question is related to our, I guess, the balance sheet and cash. So I think for 2021, if we assume company will still have some loss, and the working capital needed for expanding the business and the potential M&A. So what kind of the cash consumption or cash burn that we should look for, for the end of 2021?

第三個問題與我們的資產負債表和現金有關。因此，我認為到 2021 年，如果我們假設公司仍將有一些虧損，以及擴大業務和潛在併購所需的營運資金。那麼，到 2021 年底，我們應該尋找什麼樣的現金消耗或現金消耗？

Well, thank you for the question. Let me first try to take a shot at your question. So first of all, last year, actually Q1 was not a low base, especially in our business. Maybe in some of the other businesses, they saw the impact of the COVID-19 a bit earlier. But for us, Q1 last year, we saw 120% year-over-year growth. So it was a very strong quarter in our mind.

嗯，謝謝你的問題。讓我先試著回答你的問題。所以首先，去年，實際上第一季度的基數並不低，尤其是在我們的業務中。也許在其他一些企業中，他們更早地看到了 COVID-19 的影響。但對我們來說，去年第一季度，我們看到了 120% 的同比增長。因此，在我們看來，這是一個非常強勁的季度。

So the impact from COVID-19 started to hit us actually from Q2 and even until maybe in some part of the China today. Because, as you know, in the last few months, in some parts of the country, especially in the northern part of the country, COVID-19 came back and in some of the cities, off-line stores were closed, again, and some of our stores were impacted, too. So we're not trying to be conservative in providing the guidance.

因此，COVID-19 的影響實際上從第二季度開始影響我們，甚至可能直到今天在中國的某些地區。因為，如您所知，在過去幾個月裡，在該國的某些地區，尤其是該國北部，COVID-19 捲土重來，在一些城市，線下商店再次關閉，並且我們的一些商店也受到了影響。因此，我們在提供指導時並不想保守。

But again, as we mentioned earlier, in Q1, some of the new products for existing brand like Perfect Diary, Little Ondine will not be launched until Q2. And the contribution to our revenue from the newly acquired brands will not present themselves, will not show themselves in our financials starting from Q2. Currently, we're busy trying to integrate in Galénic and the other Chinese brands into our operations, and we haven't even closed -- actually closed. We signed the SPA for Eve Lom. That's why we had to disclose the deal, but it will take us another couple of weeks to actually close the deal.

但同樣，正如我們之前提到的，在第一季度，一些現有品牌的新產品，如完美日記、小奧丁等，要到第二季度才會推出。從第二季度開始，新收購品牌對我們收入的貢獻不會出現，也不會出現在我們的財務中。目前，我們正忙於將 Galénic 和其他中國品牌整合到我們的業務中，我們甚至還沒有關閉——實際上是關閉了。我們為 Eve Lom 簽署了 SPA。這就是我們必須披露這筆交易的原因，但我們還需要幾週的時間才能真正完成交易。

And the consolidation that we've launched numbers into our financials will start only from the beginning of Q2. So we believe that the growth rate of our overall business will start to come back or pick up starting from Q2 compared to Q1. So it's not like, all right, just Q1 growth rate year-over-year is representative of the growth rate for the full year. So your second question, I'll...

我們在財務中推出數字的整合只會從第二季度初開始。所以我們相信，與第一季度相比，我們整體業務的增長率將從第二季度開始回升或回升。所以這並不是說，好吧，第一季度的同比增長率代表了全年的增長率。那麼你的第二個問題，我會...

And then -- yes. And that is for your second question, I think it's relating to the strategy for new one and existing brands. So actually, when we are determining a brand strategy, the company will actually look at the brand development agent cycle instead of whether the brand is new or existing. So for example, even for our first brand Perfect Diary, if we identify good growth opportunities in the new category or new offering, we will not hesitate to implement a growth strategy by investing in -- continue to invest in sales and marketing to further build the brand equity and increase customer awareness.

然後——是的。這是你的第二個問題，我認為這與新品牌和現有品牌的戰略有關。所以其實我們在確定品牌戰略的時候，其實公司會看品牌發展代理週期，而不是這個品牌是新的還是現有的。因此，例如，即使是我們的第一個品牌完美日記，如果我們在新類別或新產品中發現良好的增長機會，我們會毫不猶豫地通過投資實施增長戰略——繼續投資銷售和營銷以進一步建立品牌資產和提高客戶知名度。

So basically, when we look at our brand portfolio, right, in the long term, we are going to launch more brands through a combination of self-incubation and also M&A. But even for M&A, it's not only a pure aggregating all revenues together to increase the overall group level sales, but rather, we're very good at growing the brand that we acquire. Basically growing the top line, increase the market share.

所以基本上，當我們審視我們的品牌組合時，從長遠來看，我們將通過自我孵化和併購相結合的方式推出更多品牌。但即使對於併購，它也不僅僅是將所有收入匯總在一起以增加整體集團層面的銷售額，而是我們非常擅長發展我們收購的品牌。基本上增長收入，增加市場份額。

So basically, in the long term, we are still very -- right now, we're still very focusing on top line growth regardless of whether it's new, existing, but rather looking at the brand stage and also growth opportunity.

所以基本上，從長遠來看，我們仍然非常 - 現在，我們仍然非常關注頂線增長，無論它是新的，現有的，而是著眼於品牌階段和增長機會。

Yes. Your third question is actually regarding our cash burn this year. All right. I can only talk about our operating cash flow because you can never plan ahead of time, your next acquisition activity. So this year, as we've explained to our investors, it's still -- it's going to be another loss-making year because our current focus is on top line growth. So it's going to be another -- a negative operating cash flow year for us. But hopefully, next year, we're going to be able to break even in our bottom line, and so our cash flow situation.

是的。你的第三個問題實際上是關於我們今年的現金消耗。好的。我只能談談我們的經營現金流，因為你永遠無法提前計劃你的下一次收購活動。所以今年，正如我們向投資者解釋的那樣，它仍然 - 這將是又一個虧損的一年，因為我們目前的重點是收入增長。所以這將是另一個 - 對我們來說是負運營現金流的一年。但希望明年，我們將能夠在我們的底線和我們的現金流情況下實現收支平衡。

(Operator Instructions) And the next question comes from Luzi Li with Bank of America Securities.

（操作員說明）下一個問題來自美國銀行證券公司的 Luzi Li。

So my first question is, since you gave the first quarter guidance. So for the full year, can we use -- so we are expecting accelerating growth in the -- from Q2 to the end of the year, right? So how should we look at the full year growth rate? And if it's going to accelerate from the second quarter. So what is the key growth driver behind that? Is it should be like our flagship brand Perfect Diary or our newly developed -- self-developed brands like Little Ondine and Abby's Choice or the key growth or the key contribution from the growth should come from the newly acquired brands. So this is my first question.

所以我的第一個問題是，因為你給出了第一季度的指導。那麼對於全年，我們可以使用 - 所以我們預計 - 從第二季度到年底會加速增長，對嗎？那麼我們應該如何看待全年增速呢？如果它從第二季度開始加速。那麼，這背後的主要增長動力是什麼？是應該像我們的旗艦品牌完美日記，還是我們新開發的自主品牌，如 Little Ondine 和 Abby's Choice，或者關鍵增長或增長的關鍵貢獻應該來自新收購的品牌。所以這是我的第一個問題。

My second question is, actually, could you give us more color on the newly acquired brands, particularly the Eve Lom. So how big is it as for now? So what is our strategy to grow the newly acquired brands. I believe that most of these acquired brands are skincare. So are we trying to capture the sales from the skincare brands from the existing customer base or we actually target to extend the customer base to the new customers because clearly we have a different brand positioning, the Eve Lom and Galénic are more premium. So what is our strategy?

我的第二個問題是，實際上，您能否給我們更多關於新收購品牌的顏色，尤其是 Eve Lom。那麼目前它有多大呢？那麼我們發展新收購品牌的戰略是什麼。我相信這些被收購的品牌大部分都是護膚品。因此，我們是試圖從現有客戶群中獲取護膚品牌的銷售額，還是我們實際上打算將客戶群擴展到新客戶，因為顯然我們有不同的品牌定位，Eve Lom 和 Galénic 更優質。那麼我們的策略是什麼？

Thank you for your question. For your first question, we do not provide full year guidance for our top line growth. But I said earlier -- as I said earlier, starting from Q2, we may see some pickup on our growth rate. Because as I pointed earlier, first -- Q1 last year was a very strong quarter. And Q1 this year, our business, especially our off-line business still got hit by the COVID-19 situations in some parts of the country; and two, our newly acquired brands haven't started contributing to our top line. Certainly from Q2, we're going to see some of that.

謝謝你的問題。對於您的第一個問題，我們沒有為我們的收入增長提供全年指導。但我之前說過——正如我之前所說，從第二季度開始，我們的增長率可能會有所回升。因為正如我之前指出的那樣，首先 - 去年第一季度是一個非常強勁的季度。今年第一季度，我們的業務，尤其是我們的線下業務仍然受到該國部分地區 COVID-19 情況的打擊；第二，我們新收購的品牌還沒有開始為我們的收入做出貢獻。當然，從第二季度開始，我們將看到其中的一些。

And three, if you look at our existing brands, we do have plans to launch new products or product categories. For example, Perfect Diary, we're going to be launching, for example, male product in the -- in Q2 or Q3 this year. So those will be the drivers for the -- for our top line growth for the remaining 3 quarters of the year.

第三，如果你看看我們現有的品牌，我們確實有推出新產品或產品類別的計劃。例如，完美日記，我們將在今年第二季度或第三季度推出男性產品。因此，這些將成為我們今年剩餘三個季度收入增長的驅動力。

Your second question, yes, you're absolutely right. The newly acquired brands are mostly skincare brands, like Galénic, Eve Lom and another Chinese brand. And 2 of the brands at least, Eve Lom and Galénic are actually positioned as prestige brands, and it will be very difficult for us to sell them to our existing customer base of Perfect Diary because they're just in probably different market segments.

你的第二個問題，是的，你完全正確。新收購的品牌多為護膚品品牌，如Galénic、Eve Lom和另一個中國品牌。至少其中兩個品牌，Eve Lom 和 Galénic 實際上定位為聲望品牌，我們很難將它們銷售給我們現有的完美日記客戶群，因為它們可能處於不同的細分市場。

But again, I think we have built our core capabilities in terms of our supply chain, R&D capabilities and data-driven product capabilities and also marketing through social media. So by leveraging those core operational capabilities, we believe that we will be successful in launching or relaunching those newly acquired brands.

但同樣，我認為我們已經在供應鏈、研發能力和數據驅動產品能力以及社交媒體營銷方面建立了核心能力。因此，通過利用這些核心運營能力，我們相信我們將成功推出或重新推出那些新收購的品牌。

And the next question comes from Kevin (inaudible) Research.

下一個問題來自 Kevin（聽不清）Research。

Congratulations on very strong earning results. I have 2 quick questions. The first one is that since YSG have already built a brand portfolio with different categories and price positioning, so how do we make best use of our very large user base to cross-sell because we have very large online follower base and membership. So what is our multi-brand operations strategy?

恭喜您獲得非常強勁的盈利結果。我有 2 個快速問題。第一個是，既然 YSG 已經建立了一個具有不同類別和價格定位的品牌組合，那麼我們如何利用我們非常龐大的用戶群進行交叉銷售，因為我們擁有非常龐大的在線粉絲群和會員。那麼我們的多品牌運營策略是什麼？

The second question is about the newly acquired brand, Galénic and Eve Lom. So what is our strategy on the post-acquisition integration? How to deal with their existing team and overseas distributors network?

第二個問題是關於新收購的品牌Galénic和Eve Lom。那麼我們在收購後整合方面的策略是什麼？如何處理他們現有的團隊和海外經銷商網絡？

Thank you for the question. So going back to the first one. So when we expand into the multi-brand and I guess the -- so we can leverage like our existing like customer base and also our financial capabilities. So going back to first one, I believe, so for the new brand, we acquired, so the growth usually coming from 2 parts. One part about like we can leverage existing like the capacity or customer base to either test the product or to have the brand positioning or to launch and design new products. So that's a benefit that we can get. And also, another thing that we are good at is actually to accelerate the growth of the brand we acquired in the -- based on our B2C business model. So going back to your...

感謝你的提問。所以回到第一個。因此，當我們擴展到多品牌時，我猜 - 我們可以像現有的客戶群一樣利用我們的財務能力。所以回到第一個，我相信，對於新品牌，我們收購了，所以增長通常來自兩個部分。一方面，我們可以利用現有的能力或客戶群來測試產品或進行品牌定位或推出和設計新產品。這是我們可以獲得的好處。而且，我們擅長的另一件事實際上是根據我們的 B2C 商業模式加速我們收購的品牌的增長。所以回到你的...

Do you mind repeating your second question?

你介意重複你的第二個問題嗎？

Sure. No problem. So since we have acquired Galénic and Eve Lom, these 2 overseas brands. So what is our strategy on the post-acquisition integration? For example, how to deal with their existing team, R&D resources as well as the overseas distributors?

當然。沒問題。所以既然我們收購了Galénic和Eve Lom這兩個海外品牌。那麼我們在收購後整合方面的策略是什麼？比如他們現有的團隊、研發資源、海外經銷商如何處理？

Well, I think that's a very important question about the acquisition, because integration plays a very important part when we expand the brand portfolios. So right now, there a few steps we are taking. One of the most important thing is actually we are not 100% buyout, it's more like a joint venture with the existing shareholders, which can help us to smoothly transfer the operation.

好吧，我認為這是關於收購的一個非常重要的問題，因為整合在我們擴展品牌組合時起著非常重要的作用。所以現在，我們正在採取一些步驟。最重要的一點是其實我們並不是100%的收購，它更像是與現有股東的合資企業，這可以幫助我們順利地轉移業務。

So for our partners, they're helping us to remain and then keep the existing distribution network and helping us on the R&D and product innovation. And even keeping the key employees and the brand equity and et cetera.

因此，對於我們的合作夥伴，他們正在幫助我們保留並保持現有的分銷網絡，並幫助我們進行研發和產品創新。甚至保留關鍵員工和品牌資產等等。

So this joint venture is very important to make sure that the acquisition is like a strong effort of all parties like described. So that's a very important thing. Another thing is -- so right now, we are -- internally, we are growing our organization capabilities and M&A team. So we have new talent coming from consulting firms, investment banking, and also professional services teams, and that they are very good at the executing the integration part of the acquisition. So we believe with the S&O help and also the internal teams like the commitment, we are getting better and better in executing those acquisition deals. So thank you so much.

因此，這家合資企業非常重要，以確保收購就像所描述的各方的強大努力一樣。所以這是一件非常重要的事情。另一件事是 - 所以現在，我們 - 在內部，我們正在發展我們的組織能力和併購團隊。因此，我們有來自諮詢公司、投資銀行以及專業服務團隊的新人才，他們非常擅長執行收購的整合部分。因此，我們相信在 S&O 的幫助下以及內部團隊的承諾下，我們在執行這些收購交易方面會越來越好。非常感謝你。

As this does conclude the question-and-answer session, I would like to turn the conference back over to management for any closing comments.

由於這確實結束了問答環節，我想將會議轉回管理層以徵求任何結束意見。

Thank you, operator. So thank you once again for joining us today. If you have any further questions, please feel free to contact us at Yatsen directly or TPG Investor Relations. Our contact information for IR in both China and the U.S. can be found on today's press release. Have a great day. Thank you.

謝謝你，運營商。再次感謝您今天加入我們。如果您有任何其他問題，請隨時直接聯繫 Yatsen 或 TPG 投資者關係部。我們在中國和美國的 IR 聯繫信息可以在今天的新聞稿中找到。祝你有美好的一天。謝謝。

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

謝謝。會議現已結束。感謝您參加今天的演講。您現在可以斷開連接。